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Shaowei Ke

Assistant Professor of Economics will Examine Mistakes in Decision Making

A common assumption in economics is that people make rational choices based on their preferences. But what if those choices turn out to be the wrong ones? Assistant Professor Shaowei Ke’s research specializes in those decisions that might contain errors. “I'm interested in analyzing models that describe how people make mistakes in a systematic way,” says Ke. “I’m looking at how individuals make incorrect decisions, as well as how incorrect decisions work in games.”

Ke recently joined the University of Michigan as an assistant professor of economics in September 2015. Originally from China, Ke studied finance at Tsinghua University in Beijing as an undergraduate. Determined to pursue academic research, he later joined the economics Ph.D. program at Princeton University. “At Princeton, I met a group of economic theorists who inspired me to go into theory,” says Ke.

His work can be applied to a wide array of subjects, but one example is looking at how the mistakes of individuals within a business organization affect outcomes. “What is better-- a flat organization or a vertical one?” asks Ke. “In a flat organization, two experts both submit a decision about whether to take a project or not to the manager independently. In a vertical one, expert one examines the project first. If she says no, the project is killed. If she says yes, then expert two looks into it, and if she also says yes, then the project is taken to the manager.” If both experts make mistakes, there will be different outcomes depending on if you choose a vertical or flat scheme. And this is what fascinates Ke.

“I’m excited to join the faculty here at Michigan,” says Ke. “I am happy to get to work with a lot of people who really know their stuff, and to further my research.” As a member of the University of Michigan Department of Economics faculty, Ke will focus his research on understanding error-prone choice behavior and limited foresight in economic problems.